Over the years, real estate has been a key driver in improving the financial positions for many people. It has evolved from owning homes to a growth in other income generating opportunities. Contrary to common belief, investing in real estate is not a reserve for the affluent. Small capital investment is a good place to start for those who are looking for an alternative to stock investing or mutual funds.

Real Estate BasicsTo many, real estate is about home acquisition. However, the aspect of generating income from the purchased properties is where best to set your targets. The choices range from being a landlord to a farmer or housing an office building. The choices vary depending on your choice as an investor. A careful analysis ought to be done on the amount required as capital as well as the revenue projections. After all, your investment should be profitable.

Trends show an upsurge of investment numbers in the real estate sector as opposed to the securities and bonds market. The property market is able to generate a substantial passive income that more often than not, has less hustles in keeping up with the market changes.

Popular Ways for Investing In Real EstateThe following are the basic start positions for the small capital investors or start investors that are a sure growth platforms on your investment portfolio.

1) Rental Properties

This investment avenue, has you as the landlord, earning rental income from your tenant. The rental rates should be reasonable but enough to take care of the costs of maintaining the property and offering a tidy profit margin. Some of the costs you may have to deal with include property taxes, mortgage payments, and property maintenance costs.

Landlords who manage their own property have to deal with more responsibilities in handling their properties. If you consider this a hustle, there is always an option of hiring a property manager whose sole work is saving you the headache of dealing with the tenants.

2) Real Estate Trading

Under this category of real estate investors, more emphasis is on a buy-and–hold scenario as opposed to the buy-and–rent situation. This means that acquisition of property is meant for a hold in a short period of time and selling them thereafter at a profit. This techniques is referred to as flipping property.

There are two categories of flippers. The first deals with the short-term hold of property and as such, there are no improvements done to the property. Long-term flippers form the second category and they do consider making necessary renovations that would increase the value of their properties.

3) Real Estate Investment Groups

In the real estate business, these groups compare to mutual funds in the money markets. The companies buy the property and manage the same on behalf of the clients. The company takes the active management role in the property and charges a service fee to the client, in which it is a deductible percentage of the monthly rental income.

4) Real Estate Investment Trust (REITs)

REITs are created when a company uses funds from its pool of investors to purchase and manage income properties. The investments are bought like any other trading securities but are however meant to pay 90 percent of their taxable earnings as dividends.

When it comes to other companies, they pay the tax obligation, then they decide on whether or not they are going to make a dividend payout.

Reasons Why You Should Invest In Real EstateWith proper guidance and market analysis, real estate proves to give a boost to any investment portfolio. Whether it is an investment to generate passive income or the main source of revenue, real estate offers great diversity. This is especially good to any investor in situations of economic slumps in other markets. When compared to other investment opportunities, inflationary situations are transferred down to the tenants in form of a rent increase, and thus the rent income available for the landlord, is maintained.

Real estate is a growing market and the investment opportunities are diverse. Whatever the capital injection, with the right help from professional realtors, the returns are evidence of a worthwhile investment in the sector.

You’ve finally reached a point in your life where you plan to be in the same place for longer than a 12­month lease. Instead of making rental payments on a monthly basis, you want to earn equity as you go and eventually end up with a permanent roof over your head. (We at ABODO will miss you, but we understand.) But rent doesn’t translate into mortgage on a simple 1:1 ratio — a lot more goes ﻿﻿into ﻿﻿the transition than you might ﻿﻿think﻿﻿, from the upfront costs involved to what happens if your dishwasher malfunctions and spews food­ flavored water all over your floor. As you prepare to pick up the torch of home ownership, keep these five things in mind, and you’ll be just fine.

1. There’s a lot more to pay for upfront.

Say goodbye to the security deposit. When you buy a house, there are a few different fees to contend with. The big one, which poses one of biggest obstacles for hopeful home buyers, is the down payment. T he amount depends on your mortgage, but expect to pay 10% to 20% of the home’s value. If you don’t have it, there are options to pay much less upfront — sometimes as little as 3% — with private mortgage insurance or a loan through the Federal Housing Administration. These lower down payments, however, make for higher monthly payments and a higher home price overall.

And then there are the closing costs, which average about $2,100 on a $200,000 home. This hefty sum often covers several necessities: home loan origination, title insurance, land survey, home inspection, insurance escrow, appraisal, and more.

2. Monthly payments go beyond mortgages.

Monthly, your mortgage payment can look pretty similar to your rent check. In fact, a recent study found that in the vast majority of states, buying is easier on your pocketbook than renting. You can weigh your options with Realtor.com’s calculator.

Your home is your largest investment, so you’ll want to protect it with insurance. Sure, renters’ insurance was “high recommended,”

And lastly, you’ll want to tuck away money each month for property taxes, which is usually a percentage of the assessed value of the land and the structures on it. These rates are highly localized, but the average household pays just over $2,000. Although property tax is generally billed annually or semiannually, many mortgage lenders require that money is put in escrow monthly for the tax.

3. If you don’t have your emergency funds set aside yet, now is the time.

Having a stockpile of special emergency funds isn’t specific to homeowners, but it’s increasingly important. The bare minimum recommendation is to have at least three months of living expenses to fall back on — rent, food, utilities, and every other bill — but six months is better. Some even go so far as to recommend two years’ worth. These funds will protect you in the event of job loss, appliance failure, or major medical bills.

4. You are your own maintenance crew.

Your maintenance budget now must cover more than a package of light bulbs and batteries for smoke detectors. Aside from the emergency funds you’ve saved up, you’ll want to plan on spending at least 1% of the home’s value on maintenance projects each year. When you move in (and pretty regularly after that) take stock of the appliances you have and what kind of shape they’re in to prioritize upgrades and service. When was your furnace last inspected? Is the water heater an original feature of your 1950s home? Price a few out and put that heater near the top of your list — above, for example, an air conditioner or dishwasher. If unused, this maintenance cash will come in handy for larger projects, such as a roof replacement.

More regular maintenance is required of you as a homeowner, too. That yard you’ve been dreaming about — it needs to be mowed, often. And that means you need to have a lawnmower. Still doesn’t look as naturally manicured as the neighbors’ yard? Pick up a weed wacker to and clean up those edges. Depending on where you live, you’ll also need a rake come fall (and leaf bags or a tarp to move leaves to the curb), and a shovel and de­icer come winter. Plan ahead: You’re going to want that shovel before the snowy December morning you need it.

5. Your neighbors are forever (or at least for quite a while).

This one is the easiest change to make, and probably one of the most fun. Your neighbors are no longer unseen producers of endless stomping on the other side of your ceiling — they’re your allies in the mission to create a great place to live. You don’t have to bake banana bread before you go, but you should go introduce yourself and get to know them and their lifestyles a little bit (which is a good thing to do even before you buy). Before you deny their requests to turn down your music at 11 pm — or too aggressively ask the same of them — just remember that they’ll still be there the next day. And the day after that. (Forever.)

Home ownership can seem daunting, but if you know what to expect, it’s a much less stressful transition. And if you’re working with professionals in the real estate industry, such as our Team at Seth Peterson Homes, they’ll walk you through the specifics of your situation and get you moving in the right direction.

So you’re on the home buying market. Congratulations!

And that’s not even including one of the most important factors in any new home purchase: location, location, location.

It might not be everything, but it’s almost everything. It will determine your commute,change your social life, shape your

children’s education, and affect a host of other aspects in your life.

Depending on your city, you probably have your own dream neighborhoods and avoidable boroughs. But in case you

don’t — or if you want a bit more guidance as you do research — we at ABODO have put together a handy checklist of things

to look for (and avoid) as you examine possible settings for your new house. Every day, we help thousands of people find the

perfect apartment — in the perfect spot — for their needs, so we know what to look for.

1. School Districts

If you don’t have children and don’t plan on having them, skip to the next item. But if you have a family — or think you might have

one within the next few years — school districts should be a major component in your neighborhood choices. Sites like niche k12

offer testing statistics, user reviews, and contact information for hundreds of thousands of schools nationwide — public, private, and charter. In some cases, it might be a good idea to schedule a tour, or attend an open house, so you can get an idea of how your child

(or potential child) might fit in with the culture and educational philosophy.

2. Property Taxes

You’ll be paying taxes on your house and the land it sits on, so it’s a good idea to know the general tax rate in the neighborhood

you’re investigating, and what it gets you. If you’re in the market for a particular property, it shouldn’t be hard to find the value of

the house and attendant land up for purchase, but if you’re unclear on that topic, you can always contact the county assessor for an up­-to-­date valuation. As for tax rates, the local government typically keeps those figures easily accessible online, but you’ll also want

to look at other local entities requiring tax money: public schools, town administration, etc. And depending on your area, tax rates

may be affected by a range of services. For example, in some cities tax rates are higher but include services like trash pickup and

I just listed 3414 Valley Ridge Rd #4 in Middleton, WI for $89,900. It is a 2 bed/2 bath garden style condo on the 1st floor. The condo development backs up to Pheasant Branch conservancy. The condo has brand new carpet and paint. It is about 1200sq ft and includes 1 underground parking spot and storage unit. Condo fee $195/mth. Only $89,900! This is a foreclosure owned by Freddie Mac. Great deal!

March 2012 has given us some interesting, and mostly encouraging, statistics for Dane County real estate. The number of sales for both single family homes and multi-family properties are significantly higher than they were one year ago. 358 single family home sales and 32 multi-fam properties sold in March 2012. The numbers were 262 and 5 in March 2011. A 37% increase in single family home sales and a 540% increase in multi-fam property sales!

At the same time, the number of condo sales actually decreased. 76 sales in March 2012 compared to 84 sales in March 2011 – almost a 10% reduction.

Overall, I think this is very encouraging. It is not news that the condo market is the one section of the market that has been hit the hardest. So to see those numbers still not quite recovering isn’t too disappointing, considering we saw such huge increases in sales for both single family homes and investment properties.

April has been another very busy month…at least it has seemed that way. So hopefully we see a continued increase in real estate sales as we move forward in 2012.

Did you know that you can purchase real estate with your IRA or 401k? You can! You are not tied down to volatile stocks and mutual funds. You can diversify your retirement funds. And you can take advantage of one of the best real estate buyer markets in your lifetime. So go ahead and do it!

Would you like to invest in some cash flowing rental properties? Or do you want to practice what you’ve learned from all those shows on HGTV and flip a house? Or do you just want to purchase a home that you can retire into? This is all possible, and it can all be done through your retirement account…and it can all be done tax free!

You only have $50,000 in your account? Or $20,000? $5,000? No matter how much you have in your retirement account, you can begin investing in real estate if you want. Your retirement account can either get a loan and/or co-invest with others. No matter how old you are, it is not too early to consider this as a real option. Especially now with the real estate market being so ripe for buyers.

For more information, check out this website: completeira.com. If you live in the Madison or Milwaukee area, call Mike McDermott to talk more in depth about setting up a self-directed retirement account…

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